Time Warner shares rise on earnings report 10-14-98

SteveGelsi

NEW YORK (MW) -- Shares of Time Warner rose 4 percent Wednesday after the company met third-quarter earnings expectations and posted solid gains in earnings before interest, taxes, depreciation and amortization (EBITDA).

Time Warner (TWX)
TWX, +0.72%
posted a loss of 6 cents per share, as had been foreseen by the Zacks consensus of analyst estimates, compared with a 19-cent loss in the year-ago quarter.

The conglomerate logged third-quarter EBITDA of $1.1 billion, vs. $920 million in the same period a year earlier.

Shares gained 3 9/32 to 84 1/4 Wednesday.

Time Warner Entertainment posted third-quarter EBITDA of $598 million, up from last year's $444 million. Revenue was $6.8 billion, up 12 percent over the third quarter of last year.

The company's chief executive, Gerald Levin, said in a statement that the company's overall growth is being fueled by strength at Time Inc., the Cable Networks Group, Warner Bros. and Time Warner Cable, "even in light of the current volatile economic conditions."The company's music unit, hurt in the past by an industry slowdown, "also contributed to these strong gains."

In a research note, Merrill Lynch analyst Jessica Reif Cohen reiterated a "buy" rating on the stock and characterized the company's earnings as "positive," in that EBITDA grew by 18 percent.

The company's music business "seems to be turning around," Cohen said. A rise of 20 percent in cable-networks EBITDA, according to the Merrill analyst, was "driven by the conversion of TBS from a super station into a cable network."

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